HC Deb 25 July 1977 vol 936 cc253-9

Lords amendment: No. 6, in page 3, line 39, leave out from beginning to "appeal" in line 42 and insert: Before refusing an application for registration under section 3 of this Act or an application for enrolment under section 4 of this Act, the Council shall give the person by whom or the body corporate by which the application was made an opportunity of appearing before and being heard by a committee of the Council. (1A) Where the Council refuse any such application, the Council shall, if so required by the person by whom or the body corporate by which the application was made within seven days from notification of the decision, serve on that person or body a statement of the reasons therefor. (1B) A person or body corporate whose application is so refused may within twenty-eight days from—

  1. (a) notification of the decision, or
  2. (b) if a statement of reasons has been required under subsection (1A) above, service of the statement,"

Mr. Moate

I beg to move, as an amendment to the Lords amendment, after first "made"—

Mr. Deputy Speaker

Order. We are taking with Lords Amendment No. 6 the amendment in paragraph (1B).

Mr. Moate

On the Notice Paper there is the amendment, after first 'made' insert 'and his or its advisers and representatives'.

Mr. Deputy Speaker

This gives the Chair an opportunity to filibuster. Let us get the matter straight. The hon. Gentleman tabled several amendments, but the only one to be selected is that in paragraph (1B) "leave out from 'may' to end of the paragraph".

Mr. Moate

Thank you for that explanation, Mr. Deputy Speaker. I have now grasped the point. It is a matter of some disappointment to me that not all my amendments were selected. I clearly concluded that an even better one was to be called.

I beg to move, as an amendment to the Lords amendment, in paragraph (1B) leave out from 'may' to end of the paragraph.

I welcome the proposition that there should be a more extensive procedure for an appeal system and that individuals should be able to receive a statement of the reasons for the possibility of a declinature of their application, but I can see no logical reason for the proposed limitation of time. In the case of an erasure from the register I can well understand that there is a need for a time limit. If a person has committed a misdemeanour it is logical that he should not be able to carry on in business indefinitely. But it is illogical that this burden should be put upon a new applicant that he must decide to appeal to the court within 28 days. I can see no advantage to anybody in that respect, and I would have thought that the deletion of these words made sense.

Question put, That the amendment to the Lords amendment be made:—

The House divided: Ayes 2, Noes 46.

Division No. 211] AYES [2.36 a.m.
Rooker, J. W.
Skinner, Dennis
Mr. Roger Moate and
Mr. Richard Body
Allaun, Frank George, Bruce Penhaligon, David
Atkins, Rt Hon H. (Spelthorne) Gower, Sir Raymond (Barry) Rathbone, Tim
Berry, Hon Anthony Grant, Anthony (Harrow C) Renton, Tim (Mid-Sussex)
Booth, Rt Hon Albert Harrison, Rt Hon Walter Rhys Williams, Sir Brandon
Carlisle, Mark Jackson, Miss Margaret (Lincoln) Shersby, Michael
Cattle, Rt Hon Barbara Jones, Arthur (Daventry) Smith, John (N Lanarkshire)
Cocks, Rt Hon Michael (Bristol S) Kimball, Marcus Snape, Peter
Cohen, Stanley Le Marchant, Spencer Urwin, T. W.
Davies, Bryan (Enfield N) McCrindle, Robert Ward, Michael
Davis, Clinton (Hackney C) Meacher, Michael Weatherill, Bernard
Dempsey, James Meyer, Sir Anthony Wise, Mrs Audrey
du Cann, Rt Hon Edward Miller, Hal (Bromsgrove) Woodall, Alec
Elliott, Sir William Morrison, Charles (Devizes)
Evans, John (Newton) Morrison, Hon Peter (Chester) TELLERS FOR THE NOES:
Farr, John Newton, Tony Mr. Frank R. White and
Faulds, Andrew Noble, Mike Mr. Alf Bates
Fraser, John (Lambeth, N' w' d) Page, John (Harrow West)

Question accordingly negatived.

2.45 a.m.

Mr. John Page (Harrow, West)

I beg to move, That the House doth agree with the Lords in the said amendment.

The amendment puts into the Bill a provision which I always thought existed. It provides methods of appeal to individual brokers before they are refused registration. That is helpful and satisfactory. I am grateful to the noble Lord, Lord Selkirk for raising the matter and for incorporating his ideas with others in the amendment.

Mr. Moate

The Lords amendment is helpful, although it would have been better had it been further amended. We should give credit to their Lordships for attempting to remove a significant injustice fom the Bill. I say "attempting" because I am not sure that that has been achieved.

It is important to see why the appeals procedure needs strengthening. In the preceeding clauses the Insurance Brokers Registration Council is given extensive powers to prevent people who wish to become brokers from registering. In those circumstances it must be right to provide an appeals procedure for the applicant so that cases can be considered properly.

We are all concerned about the corporate State. Here we have a considerable example of it. Considerable powers are being given by the House to a private body. Individuals who might be deprived of their livelihoods should be given the right of appeal and the right to have their cases fully considered.

Originally the Bill contained provision for a simple appeals procedure. That was an improvement on what might have been. The source of many of the provisions is the Insurance Companies Act 1974. Under the Bill a person may be refused registration because he may be considered unsuitable in character. Under the 1974 Act a company or person in control of a company may be refused registration or debarred if he is not a fit and proper person.

It is easy to understand why the promoters and the Department thought fit to adopt some of the provisions from the Act and translate them into this Bill. But that was a fundamental error and confusion, and it has caused unnecessary difficulties which the other place is seeking to remedy in part by this amendment. It was fundamental, because there is a basic difference between principals—insurance companies—and intermediaries, that is to say, the agents and/or brokers. It would have been better if this power about good character and the like had not been included in the Bill. This is a matter of the greatest importance, considering the appeals procedure.

At least the Bill does provide an appeal to the courts, but that in itself is inadequate. If a person seeking to set up in business is told by the Insurance Brokers Registration Council that it considers his character to be unsuitable, the last thing he wants is to go to court and argue in public about the reasons that caused the council to refuse him registration. I cannot think of a more extraordinary way of setting up business, particularly one that depends on good will, trust and one's reputation, than to have to go to court and show that one is not a bad lot.

The advantage that we have in this connection is that we can look at experience in the work of the Parliamentary Commissioner for Administration. Examples are available to show the sort of reasons that would lead to an appeal. The 1974 Act at least provides for a reference to the ombudsman where there is a refusal of authorisation or right to be a controller of an insurance company.

In many ways that procedure is an advantage, because at least it is done in private, whereas under the procedure proposed in the Bill the whole thing would become public in court. Thus, an individual refused registration on the ground of being of unsatisfactory character is worse off, because it cannot be done privately.

This is not an academic point. There have been some cases where it has been a consideration. It is relevant to examine how the Department has exercised its power to refuse people registration as controllers of insurance companies because they were not fit and proper persons. It is the exercise of these extreme powers that concerns me. I could—I shall not, because of the lateness of the hour—go through a whole series of cases that have been investigated by the ombudsman—

Mr. Deputy Speaker

Order. I may be wrong, but I understood the hon. Gentleman to say that he was in favour of the amendment.

Mr. Moate

I actually said that I was in favour of the amendment in that it attempted to remedy a defect. I was examining it to see whether it achieved that objective, and in many ways I think that it does not. That is the point I was examining, Mr. Deputy Speaker, but I shall not dwell on it at length. But the present appeals procedure is so inadequate that it might not even be worth accepting.

The Minister knows that the Department has been criticised by the ombudsman for the way in which it has exercised its powers. On one occasion the ombudsman said that the procedure adopted by the Department was unsatisfactory, and the reconsideration of that case was also unsatisfactory.

Mr. Deputy Speaker

Order. We are discussing not what the procedure was but what the Lords amendment suggests it should be.

Mr. Moate

I was endeavouring to illustrate that point.

The Minister of State, Department of prices and Consumer Protection (Mr. John Fraser)

Get on with it.

Mr. Moate

The hon. Gentleman says "Get on with it".

Mr. John Fraser

I have been here on three occasions when, in my view, the hon. Gentleman has grossly abused the procedures of the House. He has done that not only on this Bill but on other measures. I believe that to be disgraceful, and a vandalism of parliamentary business.

Mr. Deputy Speaker

Order. I cannot allow anyone to criticise the Chair, and what the hon. Member has just said is an indirect criticism of it. I appreciate the position of hon. Members in their relationship to the Chair, particularly at 3 a.m.

Mr. Moate

Thank you for what you have said, Mr. Deputy Speaker. I hope that one day, no doubt at great personal inconvenience, the hon. Member for Norwood (Mr. Fraser) will fight against legislation that he believes to be bad. I hope that he will use the procedures that are available to him to do his duty to oppose bad legislation. I do intend not to abuse the procedures of the House but to use them to achieve proper examination of these matters. This is the first time that there has been anything like a House even to discus these matters. It is appalling the way in which we proceed with legislation that we seldom debate and vote upon. Only occasionally has there been more than a handful of hon. Members present to discuss this important legislation.

What I was attempting to say was that whenever there have been attempts to adjudicte on the character of individuals engaged in the insurance business it has given rise to endless troubles. There have been complaints about the way in which the Department has exercised its powers, and it Is important that there is an adequate appeals procedure, so that individuals who are unfairly treated, or who think they are unfairly treated, can feel that they have a satisfactory method of appeal.

I still do not think that the provision is right. It would be right if we could introduce the ombudsman, but we cannot do that. It would be right if someone who lost his appeal to the High Court could go to the Appeal Court, but their Lordships have not seen fit to include that provision, either. The amendment provides an improvement, in that an individual has to be given a statement of the reason why he has been turned down or his registration has been refused. That is important, but it is also important that when he goes to the Council he should have with him his accountant, his solicitor and other advisers. I do not think it right that someone put in this position should have to bear the considerable costs of the hearing. If an individual is put in this position by this legislation, he should not be prejudiced as a result. In that respect, their Lordships' amendment is defective.

Although I feel that what their Lordships have proposed is a slight improvement, I should not like it to be thought that we are satisfied that we have this matter right. I still think that what is proposed is wrong. It is not clear that the amendment has such value that it is worth adding to the Bill.

Question put and agreed to.

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